Nasdaq applies to modify BlackRock Bitcoin ETF to allow physical redemption

ChainCatcher reports that on Friday, Nasdaq submitted a revised rule file on behalf of BlackRock, allowing the BlackRock iShares Bitcoin Trust Fund to carry out in-kind redemptions. Typically, when investors want to sell their ETFs, they receive redemption funds in cash. However, an in-kind redemption means that investors can choose to redeem with the underlying assets invested by the ETF (i.e., Bitcoin).

In the year before the Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs, various companies have been discussing specific technical details about how this product should be redeemed. The SEC tends to adopt a cash redemption method which means when investors want to redeem their shares of Bitcoin ETFs, fund management companies like BlackRock must first sell off held Bitcoins and then return the cash obtained from selling Bitcoins back to investors.